SALE OF PRE USED MOTOR CAR

[vishal sharma]

MY CLIENT IS A REGISTERD DEALER UNDER WEST BENGAL VAT.

IT WANTS TO SELL ONE CAR WHICH HAS BEEN USED FOR SOME TIME.

WEST BENGAL VAT PRESCRIBES 4% VAT ON SALE OF PRE USED CAR. FURTHER IT GIVES A DEDUCTION OF 50% UNDER RULE 26K TO ARRIVE AT TAXABLE TURNOVER WHICH WILL BE CHARGEABE TO VAT.

CAN ANYONE SUGGEST (1) WHETHER MY CLIENT WILL BE ENTITLED TO DEDUCTION UNDER RULE 26K CONSIDERING THE FACT THAT HE IS NOT A DEALER OF PRE USED MOTOR CAR. (2) WHAT WOULD BE VAT RATE CHARGED IN INVOICE/BILL.

THANKS

VISHAL SHARMA

[Surender Gupta]

Indeed VAT is applicable in this case since the person selling the used car is a dealer.

AI Summary

VAT on pre-used vehicle sales applies when seller is a registered dealer; invoice must reflect applicable VAT and deductions. Whether sale of a pre used motor car by a registered dealer attracts VAT and whether Rule 26K's fifty percent deduction from gross value to determine taxable turnover applies when the seller is not ordinarily a dealer in pre used cars; the advisory reply confirms VAT applies because the seller is a registered dealer but does not resolve deduction entitlement or specific invoice rate.